Growth Forecasts - The Times Of Central Asia

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Economic Growth

Kyrgyzstan Records Double-Digit Growth as Inflation Stays Above 11%

Kyrgyzstan’s economy grew by 11.1% in the first seven months of 2026, but households also faced double-digit inflation. Annual price growth reached 11.5% in July. The latest poverty figures show that 24% of the population remained below the national poverty line in 2025. According to the latest macroeconomic review by the Eurasian Development Bank (EDB), the expansion has been driven primarily by a surge in investment and strong consumer demand. Kyrgyzstan’s growth rate exceeded those reported by several Central Asian neighbors, although the figures cover different periods. Kazakhstan’s economy expanded by 4.1% in January–July. Uzbekistan and Tajikistan grew by 8.5% and 8.2%, respectively, in the first half of the year. The EDB forecasts growth of 10.2% for Kyrgyzstan over 2026 as a whole. Average real wages, adjusted for inflation, rose by 15.3% in January–June. This indicates stronger purchasing power among wage earners on average, but does not establish an improvement across all households. Investment increased by 58.8% over the first seven months. Budget financing for investment increased by about 70%, while bank financing rose to 4.3 times its previous level. Fixed-capital investment financed by foreign direct investment rose to 15.3 times its previous level. Budget revenues also increased by 48.8% in the first half of the year, while the republican budget recorded a surplus equivalent to 6.1% of GDP. Price Growth Remains in Double Digits Annual inflation reached 11.5% in July, up from 11% a month earlier. The pressure is visible in everyday purchases. In July alone, average prices for horsemeat rose by 5.4%, lamb by 4%, and beef by 3.9%, although potatoes became cheaper. Housing and utility costs were also rising rapidly, with annual inflation in that category reaching 11.2%. Fuel prices are another source of pressure. The National Bank says higher global oil prices, amid the conflict in the Middle East and concerns over petroleum supplies, have raised the cost of imported fuel. Those increases then feed into transport and production costs across the economy. By August 24, the National Bank put annual inflation at 11.7%, with prices up 7.3% since the start of the year. On the same day, it kept its policy rate at 12%. The central bank cited persistent inflationary pressure, including higher import costs and production expenses. Its inflation target range is 5%–7%. The EDB expects inflation to end 2026 at about 11.5%, still well above that range. IMF Proposes Changes to Public-Sector Pay The International Monetary Fund has also examined public-sector compensation. In a technical assistance report published on September 2, it notes pay raises of 50% for doctors and 25% for nurses in 2024. The report also records a 63% increase in remuneration for the social sector in 2026. According to the IMF, large, infrequent pay increases can add to inflationary pressures and make government spending more difficult to manage. The IMF recommends moving away from large, episodic increases toward more regular salary adjustments that account for inflation, available fiscal space, and labor market conditions. This would make wage growth and government...

Growth Forecasts

Why Central Asia Growth Forecasts Differ So Sharply

How fast can Central Asia continue to grow? The Eurasian Development Bank (EDB) and the International Monetary Fund (IMF) give markedly different answers. The contrast is sharpest in Kyrgyzstan, where the EDB expects another year of double-digit growth, while the IMF sees a much more pronounced slowdown. Both institutions are looking at the same countries and have access to broadly the same set of macroeconomic data. Their forecasts, however, reflect different assessments of how much of Central Asia’s recent momentum can be sustained. The EDB expects strong investment to keep growth high, while the IMF is more cautious about how long the recent pace of expansion can continue. The EDB is itself a regional development institution. It was established by Russia and Kazakhstan in 2006, with Armenia, Belarus, Kyrgyzstan, and Tajikistan later becoming shareholders. Uzbekistan joined the bank in 2025. The EDB is headquartered in Almaty. The comparison covers the four Central Asian states that are EDB members; Turkmenistan is not included. Its latest forecast for Central Asia is optimistic. In 2026, the EDB expects growth of 10.2% in Kyrgyzstan, 8.3% in Tajikistan, 7.9% in Uzbekistan, and 5.5% in Kazakhstan. The region’s economy as a whole is expected to grow by more than 6.5%, with its combined GDP exceeding $600 billion for the first time. The IMF gives lower figures. Its latest available country projections put 2026 growth at 4.6% for Kazakhstan, 6.8% for Uzbekistan, 6.1% for Kyrgyzstan, and 6.0% for Tajikistan. These projections were published at different times rather than as a single set of four country forecasts. The largest gap is in Kyrgyzstan, where the forecasts differ by 4.1 percentage points, but there are nevertheless modest percentage point gaps between the forecasts for Tajikistan (2.3), Uzbekistan (1.1), and Kazakhstan (0.9). These differences are large enough to raise the question: why the difference in expectations? Part of the answer lies in how the institutions assess the effect of a more uncertain global economy. The IMF expects the world economy to grow by 3% in 2026 and 3.4% in 2027. Its July update said the conflict in the Middle East was weighing particularly heavily on energy importers and warned that renewed conflict or financial-market disruption could weaken the outlook. For the four countries, this means different things. Kazakhstan exports oil and benefits from high prices, although it also depends on the condition of export routes and external demand. Kyrgyzstan and Tajikistan import a significant share of their fuel, while their economies are closely linked to migrant remittances. Uzbekistan has a larger domestic market and its own resource base. Kazakhstan illustrates the logic of the IMF forecast particularly well. Its GDP grew by 6.5% in 2025, one of its strongest performances in recent years. The Fund does not expect that surge to be repeated. Oil production is expected to stabilize after last year’s increase, with growth slowing to 4.6% in 2026, according to the IMF forecast. This does not mean that the Fund attributes everything to oil. Domestic demand remains strong,...

Economic Growth

ADB Growth Forecast Points to Strong Expansion in Tajikistan

Asian Development Bank (ADB) forecasts that Tajikistan’s economy will maintain strong growth over the next two years, driven primarily by industrial expansion and the services sector. In its latest Asian Development Outlook (April 2026), the bank projects that gross domestic product will grow by 7.3% in 2026 and 6.8% in 2027. This follows an estimated 8.4% expansion in 2025, indicating a slight moderation but continued robust performance. ADB attributes the outlook to improving industrial competitiveness and rising value-added production, which are expected to support long-term economic development and job creation. “Tajikistan’s strong growth opens up opportunities to accelerate job creation,” said Ko Sakamoto, ADB country director for Tajikistan. “By developing competitive, value-adding industries from food processing and textiles to mineral products, the country can translate growth into more and better jobs.” At the same time, inflation is projected to rise to 4.0% in 2026 and 4.5% in 2027. According to ADB, this increase will be driven by stronger consumer lending, remittance inflows, higher public sector wages, supply chain pressures, and adjustments to utility tariffs. The bank noted that the outlook remains subject to revision given the uncertain regional environment. Despite recent gains, ADB cautioned that Tajikistan’s economic structure remains vulnerable. While industrial output has grown, the country continues to depend heavily on a narrow range of products. Exports are dominated by raw materials and low- to mid-level processed goods, with higher value-added manufactured products accounting for less than 10% of total merchandise exports. To address these challenges, the report recommends a broader, ecosystem-based industrial policy. This would involve support for specific sectors, along with improvements in infrastructure, workforce skills, access to finance, and the overall business environment. ADB’s earlier assessments highlight mixed socioeconomic trends. While poverty has declined significantly from 30.9% in 2020 to 19.9% in 2024, inequality and structural constraints continue to pose challenges to long-term development.

Growth Forecasts

ADB Raises Kazakhstan’s Economic Growth Forecast, Warns of Higher Inflation

The Asian Development Bank (ADB) has revised upward its economic growth forecast for Kazakhstan for both 2025 and 2026, while also raising its inflation projections. The updated outlook was published in the July edition of the Asian Development Outlook. Growth Outlook Strengthened According to the ADB’s latest report, Kazakhstan’s GDP is now expected to grow by 5.1% in 2025, up from the 4.9% forecast issued in April. The projection for 2026 has also been increased from 4.1% to 4.3%. Key growth sectors include: Transport: +21% Construction: +16.9% Manufacturing: +8.7% Mining: +6.1% Particular emphasis is placed on the early expansion of oil production at the Tengiz field, which launched ahead of schedule. This, combined with Kazakhstan’s increasing oil exports within the framework of OPEC+ quotas, has bolstered the growth outlook. As previously reported by The Times of Central Asia, in June, Kazakhstan raised production for the third consecutive month, contributing positively to GDP growth. "Growth in tax revenues has allowed for increased government investment in capital projects and the social sector," the ADB commented. "The early launch of the Tengiz expansion has strengthened prospects for the extractive industry. OPEC+'s May 31 decision to continue raising production supports this trend, as Kazakhstan is utilizing its full capacity." Inflation Pressures Intensify Despite the improved growth outlook, the ADB now expects inflation to reach 10.2% by the end of 2025, up from the 8.2% forecast in April. For 2026, inflation is projected at 8.4% (previously 6.5%). Data from Kazakhstan’s National Statistics Bureau indicates that annual inflation reached 11.3% in May and 11.8% in June. Paid services remain the primary inflation driver, though monthly price increases slowed modestly from 0.9% in May to 0.8% in June. The ADB notes rising inflationary pressure across the broader Caucasus and Central Asia subregion. The regional average is now expected to hit 7.8% in 2025 and 6.7% in 2026 both higher than the previous forecasts of 6.9% and 5.9%, respectively. Supporting Forecasts The Eurasian Development Bank (EDB) also anticipates robust economic expansion in Kazakhstan, projecting GDP growth of 5.5% in 2025, up from 4.8% in 2024, with sustained momentum through 2026-2027. However, the EDB likewise foresees persistent inflation, expecting it to reach 11.9% by year-end. Earlier, Deputy Prime Minister Serik Zhumangarin reported that the Kazakh economy grew by 6.2% in the first half of 2025, the country’s fastest growth rate since 2011.

Economic Growth

EDB Analysts Predict Record Economic Growth for Tajikistan

Tajikistan’s economy is projected to grow at its fastest pace in two decades, reaching 8.4% in 2025. This forecast comes from the Eurasian Development Bank’s (EDB) latest macroeconomic report, presented to member states of the Eurasian Economic Union (EAEU) and other participating countries. Migrant Remittances and Economic Drivers EDB analysts attribute this strong growth to several key factors: sustained domestic consumption, a favorable external economic environment, and high global prices for gold, one of Tajikistan’s primary exports. Remittances from Tajik migrant workers remain a critical source of financial inflows, accounting for roughly 45% of the country’s GDP. This long-standing trend has consistently supported domestic consumption and overall economic stability. The EDB projects continued strong growth in the medium term, with GDP expected to expand by 8% in 2026 and 7.1% in 2027. While the pace is forecast to slow slightly, Tajikistan’s growth will remain high relative to regional and global averages. Despite these positive indicators, EDB economists caution that several risks could undermine the forecast. These include potential fluctuations in commodity prices, geopolitical instability, international trade disputes, and a possible decline in migrant remittances, especially from oil-exporting countries where many Tajik workers are employed. Regional and Global Outlook For the broader Eurasian Economic Union which includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia, the EDB projects GDP growth of 2.7% in 2025. This marks a slowdown from 4.5% growth in 2024, driven largely by weakening business activity in the United States and European Union. Globally, economic growth is expected to decelerate to 3% in 2025, down from 3.3% the previous year. The United States is forecast to slow to 1.4%, while the eurozone is projected to grow by just 0.6%. In contrast, China is expected to maintain a 5% growth rate, bolstered by policies aimed at stimulating domestic consumption and expanding industrial clusters. Despite global headwinds, the Eurasian Economic Union, established in 2015, continues to exhibit economic resilience. By the end of 2024, the combined GDP of member states reached $2.6 trillion. Intra-union trade is nearing the $100 billion mark, and the bloc accounts for 4.2% of global economic output.

Growth Forecasts

IMF Forecasts Slower Growth for Kyrgyzstan, While Authorities Project Higher Rates

The International Monetary Fund (IMF) expects Kyrgyzstan's economic growth to slow to 6.8% in 2025, even after strong performance in the first half of the year. In its latest report, the IMF projects medium-term growth to stabilize at 5.2%. By contrast, Kyrgyz authorities remain bullish, forecasting GDP growth of 8.5-9% by year-end. According to the National Statistical Committee, Kyrgyzstan's GDP expanded by more than 12% between January and May 2025, with preliminary figures placing the economy’s value at 573 billion KGS (approximately $6.5 billion). Reflecting this momentum, the National Bank of Kyrgyzstan recently revised its growth forecast upward from 8% to 9%. The central bank attributed this adjustment to accelerated investment activity, rising household incomes, and stronger domestic demand. Growth is being driven by key sectors such as manufacturing, trade, and construction, bolstered by proactive fiscal measures and robust business activity. Diverging Forecasts and Economic Narratives While acknowledging the resilience of Kyrgyzstan’s economy amid global volatility, the IMF maintains a more cautious outlook. Its report highlights a decline in inflation to single-digit levels and improvements in public debt management, both of which create fiscal space for critical investments in infrastructure, energy, and human capital. “In the medium term, growth is expected to approach its potential of 5.2% as re-export trade normalizes. However, the economic outlook remains sensitive to geopolitical risks. Strengthening fiscal buffers and implementing structural reforms remain priorities for the country,” the IMF noted in a statement. This divergence in outlook is not new. In 2023, then Prime Minister Akylbek Japarov famously wagered with World Bank Chief Economist Hugh Riddell that GDP growth would exceed 7%. Japarov ultimately won the bet, as the actual performance validated his projection, despite widespread skepticism. Experts Weigh In Economist Nurgul Akimova attributes the differing forecasts to contrasting methodologies. “International organizations use standardized models that consider macroeconomic indicators, institutional stability, and vulnerability to external shocks,” she explained. “Kyrgyz authorities, by contrast, often base their projections on optimistic assumptions about investment inflows, export expansion, and remittances.” Akimova also highlighted the political motivations behind domestic forecasts. “Official estimates serve to project confidence, both to the public and to investors. However, overly optimistic projections can obscure risks and complicate fiscal planning.” “In the short term, the government can often meet its targets by mobilizing domestic resources. But in the long run, IMF forecasts tend to be more accurate as they account for both internal and external vulnerabilities,” she concluded.